Ugandan telco says employees stole $3.5m in mobile money fraud

The technology may be new, but the scams and exploits remain the same. Manipulation of suspense accounts is one of the oldest tricks in the book for internal fraud, and suspense account reconciliation should be one of the first items on any internal control checklist or risk management plan.

Banks have known this for a long time, and hopefully it won't take mobile-led operators long to figure this out. Many operators spend a lot of time worrying about their regulators, when it's actually their own internal control environments that they should be worried about.

If sender / receiver have to enter complex details like bank account # and sort code to initiate a payment, I can understand how mistakes could creep in and why a suspense account is needed. However, going by the popular stereotype, the typical user of MTN's mobile money transfer service is likely to be unbanked and would simply have to enter the beneficiary's mobile phone # to transfer funds. In that case, I can't understand how there could be mistakes in payments and why a suspense account is required in the first place. 

Some mobile services, including MTN Uganda, will allow you to send money to an unregistered phone number. This money can then be claimed at an agent. If it is not claimed, it will remain in a suspense account. 

From here, poor controls and a lack of processes for users to redeem the unclaimed funds created the opportunity for fraud.  

@Michael J: 

Thank you for the clarification. It's clear why unclaimed payments would call for suspense account, regardless of whether they are sent to registered or unregistered mobile #s. But, unclaimed payments are not "incorrect transactions", nor do they involve customers who have "entered the wrong details", which is the context of this article and my comment. I still remain clueless about the need for suspense account in this context.